How to Increase Your Income and Make Your Money Work for You |
Posted: April 4, 2019 |
Most people think that the only way to make money is to either have a great-paying job or have an incredible business idea. As is true with many things, most people are wrong. Of course, neither of those things won’t hurt you on your way to riches but are far from being your only options. You can actually get comfortable rich on an average salary and spend your retirement without having to worry about your income. DebtThe first step towards financial independence is to eliminate any debt you may have, whether it is a credit card or a student loan. The interest you are paying on the debt will slowly, but surely eat at your income, preventing you from saving and/or investing, that is why you need to get rid of it ASAP. Depending on the size of your debt it may take a few months or a few years, but the effort you put into it will be richly rewarded down the line. High-Yield Savings AccountMany experts advise that, before you start investing your money or maxing out your 401k, you should create an emergency fund. It should be enough money in it to cover six months of your living expenses. Instead of putting that money into an ordinary checking account, where it will just sit and do nothing, you should get a high-yield savings account. Compare to checking accounts, which provide an interest rate of 0.01%, these savings accounts offer rates that are often above 1%, about a hundred times more. It won’t make your rich, but considering that your emergency fund is something you won’t touch for years, it can create a nice sum of money during that time.
InvestmentsInvesting your money is a somewhat riskier, but often more profitable way of making your money work for you. Before making any decisions though, make sure you have done your homework properly and that you know what you are doing. There are plenty of resources on the Internet that can help you better understand the world of finance, like AskTraders stock market news, and you should take advantage of them. If you are not comfortable making individual investments, then perhaps one of the investments funds can do it for you. Passive IncomePassive income requires you to invest either money or time (often both) into projects that can generate an income stream without much effort on your part. The most common ways of creating passive income are blogging, creating YouTube videos or joining an affiliate marketing network, but if none of those sound appealing to you, there are other ways. The easiest is investing in real estate, but it does require a significant amount of money. One of the ways to get a real estate for cheap is to follow foreclosed auctions, where banks sell properties that have been foreclosed. Most of them will require some work before you are able to rent or sell them, so be prepared for some hard work.
401kA 401k is a powerful tool that will help you save for your retirement, especially if your employer offers a matching program. Matching means that your employer will match your contribution to your personal 401k, meaning you can get free money by simply investing in your retirement. In practice, it works like this: let’s say your income is $50,000 per year. Most companies offer 3 to 6% matching, menacing that if you invest 3% in 401k, which is $1,500 per year, your employer will contribute an additional $1,500 to your retirement plan. It doesn’t seem much, but that money quickly adds up and after 20 years, you will be very happy that you have started paying into it early. Increasing your income and making your money work for you is an achievable goal. The reason most people don’t bother with it (and what most of the “get rich” experts don’t tell you) is that it requires a considerable sacrifice and dedication. For the most part, it is very hard to achieve financial independence and many people find it just not worth it. If you are not one of them, then perhaps this article may have helped you to at least start considering it.
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